Cambium Networks Corp. Q4 FY2022 earnings call

Management Statement and Operational Highlights

• Key Highlights: Fourth quarter revenues were $84.5 million, up 4% sequentially; full year 2022 Enterprise business grew 64% to $109.8 million, exceeding initial forecasts.
• Product Developments: Launched new gigabit solutions like 28 GHz cnWave 5G Fixed, 60 GHz cnWave, and 6 GHz PMP products. Notable customer wins included Salt Lake City, a Canadian operator in Alberta, and a fiber network operator in South Africa.
• Channel Expansion: In Q4 2022, added over 425 net new channel partners sequentially, and over 1,300 net new channel partners year-over-year.

Segment Performance

• PMP Business: In Q4 2022, revenues increased 14% sequentially but decreased 20% year-over-year. For full year 2022, PMP revenues declined 44% due to product transitions to next-generation 6 GHz and 28 GHz cnWave 5G Fixed solutions.
• PTP Business: Q4 2022 revenues increased 38% sequentially and 39% year-over-year. Full year 2022 PTP revenues increased 10% to $67.1 million.
• Enterprise Business: Q4 2022 revenues declined sequentially, but full year 2022 Enterprise revenues grew 64% to $109.8 million, representing 37% of the company’s 2022 revenues.

Guidance

• Q1 2023: Expected revenues between $74 million to $80 million, non-GAAP gross margin between 49.2% to 50.8%, non-GAAP net income between $4.1 million to $6.8 million.
• Full Year 2023: Expected revenues between $327 million to $345 million, non-GAAP gross margin approximately 50%, non-GAAP net income between $33.9 million to $36.4 million.

Risks

• Supply Chain: Still some component shortages and longer lead-times compared to pre-COVID levels.
• Regulatory Uncertainties: Uncertainty around FCC approval for 6 GHz spectrum and potential impact of the BEAD program on competition with WISP customers.

Question and Answer Q: Clarification on segment mix targets (40% PMP, 40% Enterprise, 20% PTP).

A: Long-term model, typically a two to three year timeframe.

Q: BEAD program impact on competition.

A: Confident wireless will provide affordable mission-critical infrastructure, and RDOF success indicates wireless can prevail in government installations Q: Exposure to India's 5G growth.

A: Engaged in India's 5G, but gestation may take 1-1.5 years, with 5G fixed wireless TAM growing from $890M to $1.6B by 2026 Q: Progress on 6 GHz product ramp.

A: 6 GHz products shipped in Q4, with FCC approval expected mid-2023, and scaling expected in second half of 2023 and beyond